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“The Art of The Donald in 10 Easy Steps” is a WSJ column with a crony capitalism angle:

Mr. Trump’s father, Fred C. Trump, built a real-estate empire after World War II and in 1999 left an estimated $250 million estate. One of his success secrets was taking advantage of Federal Housing Administration financing to build cheap houses in Brooklyn and Queens. The golden government apple didn’t fall far from the tree.

In the 1980s Donald Trump bankrolled people campaigning for seats on the New York City Board of Estimate. Surprise: The board decided land-use matters. Mr. Trump is one of the top political donors in New York state, according to the New York Public Interest Research Group, and Democratic Gov. Andrew Cuomo, who received $64,000, is one happy recipient. Mr. Trump said in a July interview that “when you give, they do whatever the hell you want them to do. As a businessman, I need that.”

Mr. Trump’s first big real-estate win in the 1970s was converting New York’s old Commodore Hotel into a Grand Hyatt. His dad’s friend Mayor Beame kindly extended a 40-year tax abatement worth $60 million in its first decade. In 2011 Mr. Trump told the Los Angeles Times that someone had once asked him how he had finagled a 40-year abatement, and Mr. Trump said he replied: “Because I didn’t ask for 50.”

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… toward grammar.

“The Rise of Victimhood Culture” is an Atlantic magazine piece about an email tiff between two Oberlin College students. Here are some choice phrases from folks who probably each had $500,000 of education, mostly at U.S. taxpayer expense (K-12):

• “Your not latino, call it soccer.”
• “Technically their my god-family but for all intensive purposes they are my family”
• “SO YOUR NOT RACIST”

From an investor’s point of view the issue of “microaggression” is not very interesting. What would be interesting, though, is if one could figure out a way to go short on this whole generation of American liberal arts graduates and simultaneously go long on a similar-sized group of engineering graduates in Shanghai.

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Back in 2011, the Wall Street Journal ran “California Prison Academy: Better Than a Harvard Degree” in which journalist Allysia Finley ran the numbers to determine that, at least on an economic basis, it made more sense to become a California prison guard than a Harvard grad working at a median wage.

The Federal Government’s new web site shows that Finley’s calculations remain relevant. The median pre-tax income of a Harvard graduate, ten years after enrollment, is $87,200. Harvard is big on making public school graduates take a gap year so let’s assume this person is earning $87,200. In Massachusetts, according to the ADP paycheck calculator, that’s $60,350 per year after taxes.

[Note that a superior spending power could also be obtained via the Massachusetts child support system. If instead of going to Harvard, a young person had sex with a dermatologist or Medicaid dentist and obtained custody of the resulting child, the child support revenue for a single child would likely exceed the median Harvard graduate’s spending power. In New York City, the same income would result in $56,740 per year of spending power. That amount of tax-free child support revenue could be obtained by having sex with someone earning $333,764 (NY chapter).]

Separately, note that the U.S. failed to accomplish what Chile has done, i.e., limiting the student loans available depending on the historical return on investment from a degree (see previous posting). The New York Times has an article on how the government’s cronies managed to block a Chile-like ranking (a Chilean-style hard limit on $$ was never contemplated, apparently).

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“Airline Consolidation Hits Smaller Cities Hardest” is a Wall Street Journal article about the recent wave of airline mergers has resulted in cuts to service and increases in fares in smaller American cities. “Rising house prices may be chiefly responsible for rising inequality” is an Economist story about research by Matthew Rognlie who found that owning desirable real estate was the principal driver of the wealth inequality statistics that are motivating our current politics of envy (and who among is not envious of those who bought Brooklyn brownstones 30 years ago?).

Everything that airlines do is a result of government regulation, starting from the fact that there is a U.S. airline industry at all (foreign competitors, e.g., Ryanair, who are more efficient, are excluded from the U.S. domestic market). Now it seems that airline regulation is exacerbating the disparity in real estate values. In a globalized world, being stuck three airline legs away from London or Shanghai makes a house or an office building worth a lot less. Letting a handful of U.S. airlines enjoy an oligopoly also exacerbates wealth inequality due to the fact that airline shareholders, executives, and many employees earn more the median.

Presumably this won’t change. The U.S. government is not going to disappoint its cronies by allowing Ryanair to fly from Boston to Detroit for $40 (see this page for just how little Europeans may pay). But at the same time we shouldn’t express surprise that the long-term trend for Detroit real estate is downward.

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“The ‘Golden Age for Women in TV’ Is Actually a Rerun” is a NYT op-ed by Nell Scovell, the professional writer who created Sheryl Sandberg’s Lean In. According to Scovell, there are a lot of women writers behind today’s TV shows, but this might not last:

In this sense, gender inequality resembles a bacterial infection two days into a 10-day course of antibiotics. The patient’s temperature may be down, but the Mayo Clinic’s website warns: “It is tempting to stop taking an antibiotic as soon as you feel better. But the full treatment is necessary to kill the disease-causing bacteria. Failure to do so can result in the need to resume treatment later.”

Gender inequality is still in our bloodstream, and when we stop fighting it, the bacteria multiply. We need aggressive treatment that leads to more than incremental progress.

I fantasize about the networks’ making a rule that each show’s writing staff needs to reflect the gender and racial makeup of its audience.

[See this posting on antibiotic duration for why you shouldn’t take medical advice from the NYT Op-Ed section]

I’m wondering why gender is the most important factor. If we are entitled to watch TV shows written by people “like us” aren’t there other important dimensions? Should there be a channel for 52-year-olds that runs TV shows written by 52-year-olds? How about immigrants from Laos? There is plenty of cable bandwidth. Why can’t they have comedies written by fellow immigrants from Laos?

[Readers would be disappointed if I didn’t point out that, to the extent Scovell is concerned that women in the future will not have the opportunity to earn the income of a TV writer, Real World Divorce shows how a woman who has sex with three TV writers will have, via a thoughtfully chosen state’s child support formula (equally applicable to one-night encounters), roughly the same spending power as if she had gone to college and worked as a TV writer.]

It will be interesting to see if the New York Times follows its own scolding. A 60-year-old is a typical American newspaper reader (Pew data; Wikipedia). Is the Times eager to hire and retain 60-year-old writers? (as of a year ago, the Times was doing the opposite, encouraging older workers to take buyout packages (source))

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I bought a plane ticket for a friend via Orbitz. I mis-typed on letter in her last name and that resulted in a multi-week, multi-hour series of phone calls to correct the single letter (want to know why the U.S. economy isn’t growing? look no further than our obsession with correct paperwork that exceeds anything from 19th century Germany). During one of these interactions the agent asked, regarding a traveler named “Gloria,” if the gender was “still female.” I replied “Well, it is still two months before the flight so there is really no way to know.”

It got me thinking… if gender is not an inherent physical trait, does it make sense for airlines and/or TSA to be asking for a passenger’s gender?

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Since no evil billionaire has adopted my idea of building Latin American-style towns in the U.S. (see “non-profit ideas”), the nice places to live (Manhattan, San Francisco, Northwest D.C., etc.) keep getting nicer, more crowded, and more expensive. The crummy places (Detroit, Baltimore, etc.) keep getting crummier, less populated, and less expensive (free houses in some neighborhoods!).

The Wall Street Journal has an interesting article on a federal “EB-5” visa program for foreign nationals who loan $500,000 to a real estate developer building in a poor area or $1 million to a developer building in a rich area. It seems that state governments get to draw lines around “areas” and, with a bit of creative drafting, even parts of Manhattan where an apartment costs $4,000+/month can be officially “poor”:

The neighborhood immediately around Hudson Yards includes Manhattan’s tony West Chelsea. Unemployment in the local Census tract was just 4.9% in 2012—below the national rate—according to a letter sent in May 2013 from a New York state labor official to Empire State Development Corp., a state economic-development agency.

“The current minimum threshold to qualify as a Targeted Employment Area is 12.2%,” said the 2013 letter, obtained under the Freedom of Information Act. “For your consideration, we developed an alternative area.”

State labor officials added four additional Census tracts—three along the banks of the Hudson plus one that reaches into West Harlem. The unemployment rate of the combined five tracts, said the letter: 18.1%.

State governments—eager for economic development and with little stake in federal immigration policy—tend to side with developers who want their projects to qualify as easily as possible for financing.

I.e., we’ve voted to take a natural trend and pour Chinese rocket fuel on it.

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The May 2014 crash of a Gulfstream G-IV at our home airport, Hanscom Field, has now been thoroughly studied by the NTSB. It seems that there was a design flaw in the mechanical interlock intended to prevent advancing the thrust levers when the flight control gust lock was engaged. From the public meeting:

A mechanical interlock between the gust lock handle and the throttle levers restricts the movement of the throttle levers when the gust lock handle is in the ON position. According to Gulfstream, the interlock mechanism was intended to limit throttle lever movement to a throttle lever angle (TLA) of no greater than 6° during operation with the gust lock on. However, postaccident testing on nine in-service G-IV airplanes found that, with the gust lock handle in the ON position, the forward throttle lever movement that could be achieved on the G-IV was 3 to 4 times greater than the intended TLA of 6°.

Plenty of blame to go around on this accident, of course, but it is sad that this design flaw wasn’t caught earlier.

 

 

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Tablet has a piece today on Danny Lewin, one of my graduate school classmates (and Akamai co-founder) who died on 9/11.

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Today is the 14th anniversary of the September 11 attacks. Our newspapers are filled with articles proposing that the U.S. take in refugees from various conflicts around the world. Yet our track record in handling newcomers from the places that generate most modern-day refugees seems to be poor. The 9/11 hijackers were all here in the U.S. legally, their visa applications having been scrutinized and approved by federal employees. Dzhokhar Tsarnaev, recently sentenced to death for his role in the Boston Marathon bombings, had been granted fast-track U.S. citizenship. Our economy has probably shrunk by 5-10 percent due to fear of terrorism (money spent on TSA, time wasted in security lines at airports, public events, office buildings, etc.).

How would it ever be possible for Americans to take in refugees from a part of the world where (a) we don’t speak the language or understand the culture, (b) at least a portion of those refugees have a goal of killing Americans, and (c) we have a demonstrated track record of being unable to sort out those who want to kill Americans from those who do not?

Related:

• New York Times article on the Justice Department and FBI going after a Chinese professor for emailing schematics that they didn’t understand

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